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Chapter 12 bankruptcies lower across farm country. Projections for the third-lowest net farm income in the last decade, record nominal agricultural debt, rising debt-to-asset ratios and interest rates, and continued headwinds for agricultural commodity prices had many anticipating an increase in farm bankruptcies in 2018. However, that is not currently the case.

Caseload statistics from the United States Courts indicate that for the 2018 fiscal year, which ended Sept. 30, there were 468 Chapter 12 bankruptcy filings, down 8 percent, or 40 filings, from the prior year. Filings in fiscal year 2018 were down from prior-year levels but were approximately 25 percent higher than in 2014.

Chapter 12 bankruptcies are designed for family farmers or family fishermen with "regular annual income” and provides a framework for financially distressed farmers to repay debt over a three- to five-year period. Importantly, Chapter 12 bankruptcies allow for seasonal payments to account for harvest and marketing schedules for farmers and ranchers.

While down slightly from the 2017 fiscal year, during which 508 Chapter 12 bankruptcies were filed, the fiscal year 2018 data highlights the tough financial conditions across portions of rural America. In four district court regions Chapter 12 bankruptcy filings were higher than year-ago levels. These districts represented producers in the Northeast, Midwest and Rocky Mountain regions.